Sling TV CEO Roger Lynch said he's worried about large cable companies jacking up the prices of broadband-only subscriptions to fight cord-cutting.
"They have their dominant--in many cases monopolies--in their market for broadband, especially high-speed broadband," Lynch, who heads Dish Network's (NASDAQ: DISH) four-month old OTT-based pay-TV service, told Business Insider.
Lynch said cable companies with large broadband footprints, such as Comcast (NASDAQ: CMCSA), Time Warner Cable (NYSE: TWC) and Charter Communications (NASDAQ: CHTR), "concern us because they're using their dominant position to try to thwart over the top services."
Not surprisingly, Lynch was going somewhere with this--he wants the FCC to "protect consumers" and make sure "there's innovation and competition in video." Already, the FCC has passed net neutrality guidelines aimed at prohibiting Internet service providers from tinkering with Web traffic, including streaming from OTT video companies.
Further, the FCC is currently considering rules that would give OTT-based providers of linear programming the MVPD status they need to license programming.
For their part, cable operators have a voice in the other ear--their investors--telling them that broadband services can deliver even higher margins than they are now.
"Our work suggests that cable companies have room to take up broadband pricing significantly and we believe regulators should not oppose the re-pricing (it is good for competition & investment)," wrote New Street Research's Jonathan Chaplin in a recent note to investors. "The companies will undoubtedly have to take pay-TV pricing down to help 'fund' the price increase for broadband, but this is a good thing for the business. Post re-pricing, OTT competition would cease to be a threat and the companies would grow revenue and free cash flow at a far faster rate than they would otherwise."
Lynch made his comments as Sling TV continues to expand its offering. The company just announced that TCM has been added to its $5-a-month "Hollywood Extra" add-on programming package.
For more:
- read this Business Insider story
- read this Sling TV announcement
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